South African rand slips, stocks weaker

JOHANNESBURG, — South Africa’s rand weakened by more than half a percent yesterday as the dollar extended gains on the back of a slide in global oil prices. Stocks declined a fourth straight day as mobile operator MTN weighed on the bourse.

By 1030 GMT the rand had slipped 0,61 percent to 15,6510 per dollar, a new 2-1/2 week low as demand for the greenback and thin-trade ahead of the long New Year’s Day weekend put the local unit on the backfoot.

Yields on government bonds rose sharply, with the benchmark 2026 issue adding 12,5 to 9,77 percent.

The rand is on track to end 2015 more than 35 percent weaker against the dollar, with Africa’s most advanced economy battered by severe electricity shortages, drought and the shock removal of the finance minister in the past 12 months.

While the unit has back-pedalled for most of 2015 as the spectre of rising interest rates in the United States weighed on emerging market currencies across the board, it took its heavy knock when President Jacob Zuma fired widely-respected Nhlanhla Nene as finance minister earlier in December.

The rand sank to a record-low 16,0485 shortly after the shock sacking as investors baulked at the appearance of political interference in the Treasury.

Yields on government and foreign currency bonds soared as the massive sell-off of South African assets and political fallout that ensued eventually saw President Zuma hire former finance minister Pravin Gordhan to the post, a move that eased the selloff.

On the bourse trade was feeble as the Johannesburg Securities Exchange closed early, as scheduled, at 1000 GMT.

Around 60 million shares changed hands on the stock market, according to preliminary bourse data, well below last year’s daily average of 183 million shares.

MTN was the biggest loser among the blue chips, shedding 4,17 percent to close on R132,89.